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I did start investing at an early age. From the age of 18 I started putting money into an IRA and a 401K. I bought a house at the age of 25 to start building equity.

Now I'm 32 and the market has gone to fucking shit, and my house is worth less than what I owe on it, and my IRA and 401K are hemorrhaging money.

I feel ripped off and pissed off. I don't want to say it's not good to save. It's not like it would have been better if I had blown that money on hookers and cocaine, I'm just sayin' people who did blow their money on hookers and cocaine aren't much behind me financially at this point.

That's almost unbelievable. Where do you live? In my neck of the woods, housing prices peaked in '07, but fell back only to '03-ish levels. If you bought with the intent of building equity, you must not have had an interest-only loan or whatever, right? So how far did housing prices fall where you're at?

Asbestos removal & disposal, hazardous waste disposal, gas line/tank removal & disposal, septic tank/line removal & disposal plus disposal of all the torn down houses. You can't just bulldoze down a house and consider it an empty lot.

Someone does need to go in a do it though. Problem is the city officials are in denial about what is happening. They just keep slurping up the scraps of taxes that come in and think some biblical event is going to occur that saves the city.

Would actually be much more beneficial to build a 100' wall around the city and declare it a prison (ie Escape from NY).

That's where it gets tricky. One of the reasons Detroit is a shithole is because you have to pay a %3 income tax for the privilege of living in a shithole. The fact that you own property in Detroit means the city will come after you for property tax and income tax even if you don't actually live in it.

Some people are, mostly there are tons of back taxes owned on these properties so you'd have to pay the $5k plus that. The county isn't quite ready to give up on that yet, but eventually they will and the prices will rise.
Generally the ones that are still upright are a little bit more than that, but you can find a good deal. http://realestate.yahoo.com/Michigan/Detroit/homes-for-sale

Here is a very good article about the similar situation in Cleveland. It talks about a few people who are buying up houses en masse and trying to resell, and also the red tape surrounding leveling houses (there seems to be a political fight between those who want to do this and those that don't; it costs a lot more money to level the house than the house/land is worth in most cases, it seems). The whole thing seems to be a catch 22. The more the neighborhood decays, the harder it is to bring it back up. Who wants to be a house or land in a dangerous, abandoned city?

You can actually get property there for nothing. The problem is that most of them are not up to code and have multiple violations that would have to be corrected before you could sell it again, plus the taxes.

Holy shit. Until I read this thread, I hadn't realized exactly how bad it was. My god. I mean, I knew it was bad, people buried in debt loosing their homes, but damn. If you can't sell a house for 5k, that's scary.

As other people have said, buying a house in Detroit carries a lot of baggage. They tax you like it's New York City but provide services like Somalia. I don't think they even have a Fire Department anymore.

Thousand schmousand, you can actually get houses in Detroit now for a couple hundred. I lived across the river in Windsor for a couple years; you can practically see the city falling apart from across the river.

A house is not really an investment at all unless you are rich enough to cover yourself in other places in case the housing market collapses. "Building equity" is nice, but should only really be done once you are pretty much secure financially in other places.

It sucks that you are in Detroit, since property values rose pretty much everywhere else in North America except Detroit. Have you thought of moving out of Detroit? Could you sell your house, or rent it out?

Nope. I got a 30 year at 5.125% and put 9% down. I was all Mr. Rodgers about this shit. I just happen to live in the Metro Detroit area. It's getting to be like Megaton City around here. People are just piling shit into their cars and heading South. Abandoning their property.

I'm so sorry. Detroit is different and I take it back. I have several friends from the area that have relocated to the South. One is stuck with a house, one is glad they sold at a slight loss last year, the other is thankful they never bought.

A friend of mine got a mechanical engineering degree from BU. Went to Detroit to build cars. In five years he'd been laid off by Ford, laid off by Chrysler, laid off by GM, and irony of ironies, was last laid off by Mike Milken.

Before he had given up, there were eighteen families left on his street. There were 30 empty houses. Two people had jobs.

He now lives in his parents' basement in Santa Fe. The career he retrained for? Real Estate.

I disagree. The Michigan legislature keeps raising taxes on small business and giving tax breaks to the Big Three. That drove away small businesses and kept the Big Three here. Except now they are dead and the small businesses are all gone. So now we have nothing.

Combine the taxes with the fact that Detroit is the home base of the UAW so our cost of labor is one of the highest in the world.

well, BEFORE you do anything...educate your self. It is absolutely critical that you understand what you are doing, and DO NOT take some 22 yr. car salesman advice (otherwise called financial advisor)...they get paid to screw you. Sorry to say it but YOU have to educate yourself.

rule of thumb (in no particular order) *, there is no free lunch. Potential risk increases with potential earnings...ie. if they say you will earn a lot, there is a higher probability that you will loose money *. if you want to trade yourself, the only chance you have to consistently outperform the market is if you have more information than they have...this is not very likely *. if you trade yourself, disassociate yourself from the money, DO NOT trade with feelings, be absolutely disciplined, and never yield from your predefined parameters *. you are more likely to earn if you spread the risk (diversify your portfolio). *. Only play with money you can lose. *. Statistically old performance is NOT an indicator of future performance, which means you are better of with a diversified portfolio

there are tons of these, but just make sure you know what you do, and even if some douche in the bank tells you put money into some instrument you do not understand, DO NOT DO IT...take the information, and do your research.

Just wanted to reinforce the DO NOT listen to financial advisors. A relative of mine is a 'financial advisor' and a few years ago he lost his own house due to completely immature spending, and has used other relatives as crutches since. Not only are you paying them to waste your money, they might not have a clue what to do with their own money.

I started putting into RRSP's at age 19 at the advice of my parents who pushed me to do it. I saved up and bought my first house a few months ago at age 24. I bought in at the right time, prices had crashed here (Canada, different market). I don't feel ripped off, I feel I jumped in at a great time, and once the markets have stabilized (I don't expect it to rise in the next year or so).

The problem with housing, is people bought in at the peak thinking it was only going to go higher. I HELD off buying a house because I was looking at things in general thinking this can't sustain itself. Sure enough, boom. Now I've bought in while prices are low.

You havent' lost your shirt either, you may have lost SOME, but believe me, you're probably still better off than most. Give it a few years, and see where things are at then. You aren't the only one hurting from this mess, think how many people are putting off retirement now because of how much they've lost in their retirement funds?

Real Estate, just like any invesment, is a gamble of sorts. There is never NO risk. In this case, the house is now worth less than the amount you owe on it, that's was a calculated risk that didn't' work out. It's not a fun one, but eventually it will work itself out.

the house is now worth less than the amount you owe on it, that's was a calculated risk that didn't' work out. It's not a fun one, but eventually it will work itself out.

Yeah, I agree. I didn't really buy the house as an investment per say. I really just needed a place to keep my computer so it doesn't get wet when it rains. And it does that quite well, regardless of what the market says. I don't know if I'll keep this house my entire life, but I fully expected to keep it for "decades" when I bought it. I never had any plans to "flip" it.

Well it's different in certain parts in Canada. In the last year Vancouver has lost a lot of value, and Victoria (where I bought) lost almost 14% in some areas. I bought in after this mini "bubble burst". I haven't looked a lot in Eastern Canada, but I heard Nova Scotia and New Foundland saw considerable gains.

You're 32. The money will come back and then some by the time you reach retirement, unless you were hoping to retire at 35. In terms of retirement accounts, the only people who have anything to worry about right now are the people who are at/near retirement age and need the money now.

As for the rest of you, be glad the Republicans couldn't talk us all into privatizing Social Security.

Yeah, but there is still a big impending problem for Social Security. Social Security is a lot like a Pyramid Scheme. The next generation pays the bill for the current generation. Money taken out of my check today is going to retired people today. Birthrates world wide are falling. It's a reasonable assumption that if birthrates continue to fall 1 generation is going to pay SS for their working life, and receive nothing in retirement.

My fear, and the reason I started saving early, is that the baby boomers will be the generation that collapses the system, and my generation will be the one who pays their whole lives and gets nothing in return.

you cant' get rid of the interest..you pay that interest whatever you do..via bonds or foreign debt...you still need tools to adjust the currency rate, growth...and inflation.

Of course the foreign debt will be a significant cost in the future, and it is typical that the baby boomers are spending it all...after all they were born after the war, with an INSANE growth, and really have never had much go against them...of course they'll leave us in the crapper.

If you look at historical market data, even with the recent crash, you'd still be better off investing in almost anything other than Social Security. There are a lot of people who are projected to get back less than what they put in. For most of us, the rate of return will be around 1%. That is, if the program doesn't bankrupt the country. $40 trillion unfunded liability, my friend.

These calculations are moot, though. As benefits are about to be cut, and the taxes increased -- making it an even worse deal.

I started investing early. My advice is to keep investing. Every pay check. Start with your 401K and IRA and max those out every year. Then start on personal savings (cash, cds, bonds). Then start on ETFS (bond funds, s&p 500, etc). Throw some gold/silver in that mix and other commodities. Then start investing in individual stocks (use DRIPs or share builder).

When you want a house, save up 20% and get one. Watch your credit score and get a good rate.

Buy a gun, learn how to use it. Buy some storage food and "rotate" it. Keep water stored , change it out every 6 months. Buy camping gear and learn to camp.

Go to college or go back to college. Even if it's only one class a semester.

Make sure you have health insurance, dental and eye.

Take care of yourself. Read, exercise and eat right. Don't smoke, don't drink to much or do drugs to excess.

Don't use credit cards unless you pay them in FULL every month (to collect the rewards). Use an interest bearing free checking account (Salem direct, etc).

Every year, set aside some "play money" that you are willing to lose. Use this to try wacky and risky investments or "get rich" schema. try trading on forex or gold/silver or options. Sure, you will probably lose this money; accept that; but don't lose what you learned from it and don't go over your "allotted" 'play money' number each year.

Most important. This is the most important advice I have. Whatever you do and no matter how much money you have, the important thing is to keep investing. Even if it's $100 a month. Keep doing it and never stop. The small things add up. Even in hard times, find money to put away into investments or savings. Invest in yourself too; this is just as important. Read every day. Exercise and eat right every day. Set goals for yourself.

It's not the big things that pay off, it's the small things that you do EVERY day. You don't cut down a tree in one chop, it takes a bunch of small ones. You don't lose weight from one long run, it takes a lot of them. You don't learn a subject by reading the entire book in one setting. It comes from studying a little bit over a long time. Same with investing. Invest a little bit, every day, over a long time.

"Required" Reading:

Random walk down wall street

Crash proof (take with a grain of salt).

All your worth

The Intelligent Investor

Economics in one lesson

Also important: You will some times lose money. This is ok. Be willing to "let go" of loses.

I had very little choice where my 401k money was put. My company just had profiles I could pick from. Like "risky" or "conservative" type stuff. I tried to be conservative. I actually had the largest portion going into a profile called "guaranteed", which as I understand it, was literally investing in the price of Gold. Sadly they took that option away around in 2001.

The fact that they removed the option for gold feeds into my natural fear of conspiracy theories. :)

I've since cut my payroll deductions from 15% to 3% and I'm putting all my extra cash into paying down the principal on my house. Even if the house isn't worth shit, it's still good to fully own so I have a roof over my head if shit ever really hits the fan.

At least until State Property is implemented in the United States (something I believe will happen in my lifetime).

Certainly contribute up to employer match -- that's a 100% return for free right off the bat. It doesn't really make sense to invest beyond that until you've paid off all debts except mortgage and have $10k or so liquid savings in the bank (for emergency / unemployment funds).

This is a cute quote, but really pretty useless advice in the real world. Lots of people were "greedy" when the dot com bubble was unwinding. To this day they still haven't broke even. The devil is in the details of when there is "blood in the streets" and when the bleeding has only just begun.

Lots of people WERE "greedy" when the dotcom bubble was unwinding. Using the buffet quote, you should have been fearful and pulled out your money... Your example is great support for the quote, but it contradicts what you wanted to get across.

People were net fearful throughout that time period (2001-2002). You can look at the VIX (aka the "fear index"), or, you can just state that when the market is dropping, there is a net consensus that it will continue to drop (why else is everyone selling and demand drying up?) Lots of people tried to catch the falling knife and ended up losing some fingers.

B. If you have a job invest into your 401K the maximum amount to which you company will match you.

C. Set aside a nest egg of savings (CD's, money market type investments) and once you have saved up some you can research a money manager and look for somewhere to invest. It's all about diversification.

Alternative D. Your dying of cancer but don't have the funds to pay for the treatment. Your going to die before seeing your daughter's wedding. You wish you would have saved/invested some money for retirement and emergencies.

Luckily I don't. But I know many who don't and this is a very real predicament for them.

I know people who have lost their houses, cars and most of their belongings due to health conditions once they got older. Some of them even had insurance but once the conditions started they got dropped.

My dad had cancer at 41. He had a lot of money saved up and was an executive. It was only a two week span from the time they found out he had cancer to the day he died. He was supposed to start chemo later in the day, he never made it past 9 AM.

Many years later, here I am, different type of cancer, but the point is the same.

Fry: Oh, no, I'm boned! I haven't paid into the pension either. What'll I do when I retire?
Bender: I thought you were retired.
Fry: Hey, I don't see you planning for your old age.
Bender: I got plans. I'm gonna turn my on/off switch to "off".

I've read that vanguard has good funds. Watch out for any sort of fees, they can easily eat up any gains you make.

And doing it young is the best time...TVM. I maxed out my 401k and stock matching programs too the point I was choosing between food and a vacuum cleaner when I was starting out. I'm doing very well now.

I am 50, and I wish I had started investing much earlier than in did, which was in my early 30's. Concur on the sound advice given to start with a Roth, and play the 401(k) drum even though investment choices are often both poor and limited. Fidelity and Vanguard are both solid outfits, the latter requires more money initially but has the lowest costs in the industry that I know of. Costs are the only factor you CAN control, since returns are certainly not guaranteed so minimizing costs is crucial.

Question, I've been looking at the same thing and I'm young as well (23). My company matches something like 5% through their 401k program so I'd rather use theirs than a separate Roth IRA. It IS transferable to an IRA should I ever leave, however the only question I have is that I need to pick which mutual funds to invest in as well, and seeing the economy drop has scared me away from getting started. What would you do?

We're about the same age, and I started investing with the 401(k) offered by my company over a year ago at the max they would match (first 2% dollar-for-dollar, another 2% for 50 cents on the dollar); however, with the economy tanking, I've effectively lost half of the money available.

Would a Roth IRA be a good way to safeguard against huge losses in the future? Or would spreading money around merely avoid placing all eggs in the same basket, minimizing loss?

There's nothing intrinsically safer about an IRA vs. a 401(k) of the same type (traditional vs. ROTH). You do, however, get much more freedom in an IRA (basically, you can do whatever you want), whereas most 401(k) programs have severely limited choices. You should take advantage of any 401(k) matching program, though, since it's free money.

"Safeguarding" your money is a little tricky... Keep it as cash and you lose nothing, but you don't match inflation so it's an effective loss. If you can find a savings account, CD, treasury bond, TIPS, etc., then you have a very low risk of losing your money and the interest you earn may match inflation (or at least reduce the amount of effective loss). Of course, the efficiency of the free market largely ensures that it's not trivial to safely earn a good return. BTW, the whole CDO/CMO mess was exactly about people with lots of money trying to protect it (at least on the investor side, there's more to the story on the credit, housing, banking, and CDS side).

You probably want a conclusion... All of the investing guides I've read that don't reek of snake oil say the same thing: invest diversely, dollar-cost average, and don't worry about it. The vast majority of investors (professional or otherwise) do worse than this plan. I ran the numbers and it's true that this plan is positive and beats basic CD rates over every 30 year period from 1930 until the present... except for two times (this is the part that investment folks forget to mention). The two times are: (1) investing right before the great depression, and (2) retiring right now. :P I ran against the DOW, but you're probably better with a wider basket like the Russell 2000 or 3000. HTH

In my understanding, an IRA and a 401(k) are just a sort of container that classifies how it is taxed [Edit: and rules how much you can contribute per year or whatever]. Once inside that container, you are generally free to invest it just like cash in your pocket (although the company holding your savings "container" may limit your flexibility depending on what services they provide).

I had a company 401K and rolled it over into a Fidelity IRA when I left the company. They are called "Rollover IRA" but only difference is the name. One thing to find out is check the minimums of the funds your company offers and the tax effects. When I took my money out I paid a big fee for earl withdrawal, effectively. Matches are nice with company matched but when you leave I believe they calculate the fees then.

Check out Vanguard also for funds, really low expense ratios and a wide variety of different funds.

I'm a 22 year old college student doing Mech Eng, I have no knowledge in business concepts and my family is one that doesn't like risks, so I was never really interested in investments.

That all changed this past march when Citigroup hit below a dollar and economy was at a bottom. I started to keep track of certain stocks around the time they started to make some rebounds. A friend of mine who was in business suggested diversification, that is to buy ETFs or a bunch of stocks from different sectors. However I don't have that kind of money to buy a lot and given the state of economy (it was on the rebound), I figured any decent company with low probability of default within a year would be a decent investment.

I know reddit hates the banks and all the financial institutions; even yesterday, one of the headlines was ranting against Bank of America. However, with no possiblity of nationalization and default and a very attractive price, I invested in some of the financial institutions.

Now I split my money in a 60-40 ratio. 60% I invested in banks as an investment. The other 40% I used to day trade the same banks. Day trade is purely gambling, if I can go back in time, I wouldn't have done it as a newbie.

But everything I own has gone upward, for example Bank of America was around $6 a share when I entered and today its at $11 a share.

So that's my experience. I think it's still a prime time to invest but make sure you do a bit of research and track the market before jumping right in. Good luck.

Yeah, that $6 for Bank of America was on at the beginning of March and we didn't but then, and still kicking ourselves, but we bought a week later. Yeah, we are up $$$, but the past week has seen our $$$ go down.

congrats, you are very lucky. To say that putting 60% in banks is an investment is silly. If you don't diversify, over time you are practically throwing money away unless you are an extremely sophisticated investor. It is not expensive to diversify, just buy an index tracking ETF.

If you're looking for quick cash from this then you're not doing anything better than gambling. The house always wins I'm afraid and there's no free lunch.

In the long run you should do fairly OK with a diversified portfolio. I think that most companies are undervalued right now, but the market can go down even more.

I bought real estate when it was cheap and I'm renting some out now, but luckily I didn't get in this game in the past 5 years when the prices were way over-inflated. Unfortunately I wasn't wise enough to get out of it at the height of the bubble either. Now I'll probably end up holding those properties for 5-10 years.

The trick that I use now is that I only invest when I have an extra benefit besides the expectation of dividends and a stock value increase. I maxed out my employer's stock purchase plan where they match every share that I purchase if I stay with the company long enough. The only way I can lose is if the stock continues to go down by 50% or more during every matching interval (3 years), from now until I get out of the plan - which is highly unlikely - or if they go banrupt altogether of course, which can happen but they've been around for 200 years, I trust they'll survive another 20. Second thing I maxed out is my tax deductible pension saving fund - I contribute every month as much as I can deduct from my taxes. Also I carry a mortgage for tax reasons - my interest rate in 2.2% per annum, tax deductible so the real cost is more like 1.5%, way below the inflation rate.

First, educate yourself before investing. A lot of people are told to invest in funds such as the 401K where "professionals" put your money along with other people's money (OPM) and invest it all collectively as they see fit.

This may work in good times, but in a crisis, like this one, it often ends in you losing your money and your "account executive" keeping his bonuses.

So, my advice to you: #1 Educate yourself.

Why? So that you can invest by yourself, not through funds, and so have better control over the risks.

2.- Accept that every investment carries risks, and that the higher the promised return, the higher the risk. This is specially true for scams. If someone promises you a return that is way above market average (1% a month, for instance), then he is probably going to keep your money and run. That doesn't mean all risky investments are scams. Look at third world countries. Their risk derives from the difficulty to move money into and out of the country, or due to corrupt politicians. Doesn't mean honest businessmen in these countries don't exist, or that they will lose your money. It may just take a little bit more time for you to see a return, but it will be more substantial. In any case, accept that risk is part of the game and you may, eventually, lose some or all of your money, and you should protect yourself in that case.

3.- Taking into account risk, and the possibility of losing money, learn to diversify. This means, don't put all of your money in one place. Put some of it in safer places (gold, regular savings accounts, real estate, if you can afford it, and so on...) and put some in riskier places (stocks, bonds, etc...) The higher risk investments will provide return, while the lower risk investments will provide security. Even in higher risk places learn to diversify. Some industries or companies are cyclical and so maybe in Year 1, company X will make profit and company Y will not, but in Year 2 things may change and will be the other way around. If you have investments in both, you will diminish your risk.

4.- DO NOT INVEST WITH OPM. This means, do not ask for debt to make investments. Save first, and then invest. A Mexican gold coin costs about $1,000 dollars. I am sure American minted gold coins or similar gold instruments can be purchased for similar prices and they can be your first investments, as your savings account can be as well. Once you accumulate enough wealth, by yourself, to go into bigger things, then do so. But do not take risks with money that is not your own, because losing other people's money makes you liable.

5.- Finally, have a goal. Learn that the accumulation of wealth is not a goal in itself. Once you reach enough money for retirement/buying a house/buying a car, or whatever it is that you want the money for, DO IT. Enjoy yourself and do not worry too much about money, at least, not more than you should. Money comes and goes, and the financial system will teach you this cruelly if you are not careful. But the most important things in life may only come once in a lifetime. Cherish them.

When I was 28, I won $8,000 in a poker game and bought 28 acres of land in the Catskills. Over the next 30 years, I built a cabin, put in a road, a pond, a septic system, and electricity. I sold it for about $160M, which isn't a huge return, but meanwhile I had a terrific place in the country for 30 years which made it the best thing I ever owned or did.

When I was 34 I got married and bought a house in Westchester for $100M, which I sold after 25 years for $1.2 million. Comes out to 10% increase in value a year, roughly. Meanwhile, I had a terrific house for 25 years.

My advice is, if you can live in your investment, you're getting three times the return: 1) not throwing rent money away 2)Real estate value and equity, and 3) Living in your own home. I don't know what the real estate market will do in the next 25 or 30 years, but neither does anyone else, and I didn't when I bought my places.

Rent sucks, and is the worst thing you can do with your money. Buy something and live in it. Pay off the mortgage with extra equity payments. Good luck!

Do you feel like it was easier for you to buy land, and then a house, 30 years ago (as compared to how it would be for a 28-34 year old to buy one today)? I feel like it was, but I have no perspective.

If by "easier" you mean "more affordable," I was pretty broke when I had to get together the money for a down payment and closing, moving, etc.

But look - when I bought that house for $100k 25 years ago, the old timer next door to me told me I was crazy to spend "six figures" on a house. He had paid $25k for his, etc. Same story, maybe a new generation.

House prices are pretty low now, and they're going to increase in value again - really. Rent gets you nothing but a receipt. Buy a house and you have a retirement fund you can live in.

Actually, it was a "friendly" game with six other guys I worked with, some a lot older than me. We were playing Acey-Deucy, where the pot doubles repeatedly, and the pot went from about $100 to $8000 (a lot of IOUs) in about an hour. It came my turn, I drew a 3 and a Queen, spun the pot and won it. I haven't played poker since.

I agree. I never want to own a home. I love not being shackled to the chores that come with it. I ask my friends what they're doing over the weekend and it's all "going to home depot to pick up some paint" or "gotta clean out those rain gutters" or "remodeling the kitchen" or "dealing with the roach problem" and on and on.

And I'm just like, 'have fun'. I'm going out on the town and then will wile my time by reading, lounging and sketching in a cafe. Meanwhile, my landlord will take care of that pesky clogged drain.

Who cares about having tons of money? If you have just enough disposable income to treat yourself, you're set.

My comment is in reply to an inquiry about "investing." IF someone is relatively stable, buying a house really does make good investment sense for a HUGE portion of your income and expenses, compared to renting, which gets you squat.

Old Man Bluth’s in jail. I think his son is running the company. Doesn’t seem like a total moron to me. You know what? I’ve had this thing as a triple sell, and I am upgrading it, right here, right now! I think this thing could even go as high as a “Don’t Buy.”

Yeah I thought about this after seeing how much I spend on junk but had the hardest time not buying my occassional starbucks and such. Thus I gave myself a misc. allowance each month for this purpose and never go over it. That way I have no surprises and have a much easier time denying myself stupid little cravings.

The soda as water thing isn't even an exaggeration. I know one guy who he and his wife has three boxes of diet coke in their garage at any given moment and they "never felt a need to drink water." They recently felt adventurous and bought a box with lime flavoring. I shudder.

I am the daughter of a physicist turned successful investor, who lives on his investment income and paid for my college education and more, and I had little finance education until recently. (I'm 28.) I started investing a bit a couple of years ago, but only investing in what my dad told me.

Well, I would say its actually an advantage to grow up in a household with poor financial habits. In my case, the reason I began saving/investing immediately out of school was out of fear. People who grow up with parents who saved diligently during their youth would not see the consequences of poor planning, and may assume that you don't really need to actively work on personal finance.

I was an investment advisor for a while and I definitely wish I had started at a younger age. You can't start too early, in my opinion.

Here's the advice you want, it's actually pretty simple. Diversify as much as possible to mitigate risk, only buy securities or Mutual Funds that make sense for your timeframe, and don't buy roller-coaster investments unless you are positive you can handle the ups and downs without losing any sleep. I'll make this into its own post since there seems to be interest, I'll try to answer every question but I can't guarantee the swiftness of my replies.

Thank you for your input, I have the noobish of all noob questions: where should one go to get started? I read up some articles but didn't understand a word. Can one just call up a professional investment advisor from a phone book? What kind of investment advisor would be willing to deal with starters like myself? (I'd imagine most professionals deal with large trades and large funds...)

So sorry if this sounds utterly clueless. If you can point to a guide for idiots that would be great. Most guides seem to require a level of familiarity with investment.

Buy value and hold it. If I'd never sold anything, ever, I'd be much better off today, even if I count the shares that took a rocket sled to hell. Learning to lose money and not fret about it has been helpful too.

I'm in my 40's and a buddy of mine spent a lot of time and effort investing over the years, and I'm pretty sure he now has multiples of $100K as a result. I was always a bit jealous but at the same time never had the time nor inclination to really get off my ass and do the same thing.

My wife and I spent our time paying down our mortgage instead of buying nice furniture, fancy trips, etc. We had our first house paid off, before buying a more expensive one. Now we almost have this one paid off.

I have to say that we take a lot of pride in having paid off a debt even though we could have financial-wise made more money playing the market. But I have no regrets.

My suggestion is to go to The Motley Fool website and follow their advice: pay off your credit cards, keep a float, etc.

Then if you think you've absorbed those principles there, perform lots of due diligence in researching and understanding and invest in a few select stocks which you think are the most undervalued.

But the most important part is the first part. Read the wisdom in those books. It is everything you read. Subsequently, analyzing what other investors such as Klarman are looking at is a very good idea as well for gauging value.

well, BEFORE you do anything...educate your self.
It is absolutely critical that you understand what you are doing, and DO NOT take some 22 yr. car salesman advice (otherwise called financial advisor)...they get paid to screw you. Sorry to say it but YOU have to educate yourself.

rule of thumb (in no particular order)
*, there is no free lunch. Potential risk increases with potential earnings...ie. if they say you will earn a lot, there is a higher probability that you will loose money
*. if you want to trade yourself, the only chance you have to consistently outperform the market is if you have more information than they have...this is not very likely
*. if you trade yourself, disassociate yourself from the money, DO NOT trade with feelings, be absolutely disciplined, and never yield from your predefined parameters
*. you are more likely to earn if you spread the risk (diversify your portfolio).
*. Only play with money you can lose.
*. Statistically old performance is NOT an indicator of future performance, which means you are better of with a diversified portfolio

there are tons of these, but just make sure you know what you do, and even if some douche in the bank tells you put money into some instrument you do not understand, DO NOT DO IT...take the information, and do your research.

I started saving for a house at the age of 35.At 38 I put down 35% down on a house.At 45 the house was paid off.Next goal was to save enough money so the interest would cover monthly bills.I am pretty close to doing it.
My idea was side-jobs.At 35 I vowed to make $30/day doing odd jobs.Plus keeping a full time job.Saved everything from regular job and lived of the extra income.Its easy to make 150 to 200 working 3 to4 hrs on Saturday or during week day.I do live in Calif.,stress free.

I always saved a bit (35.) The first bonus I ever got I dumped into stocks I thought were with good companies...in 2000. Boom. Lost 75%, took it out, went on vacation.

Since then I've always earned enough money to live pretty well, with the exception of a few recessions; what I'd put aside always got me through. Where I live there's a government + mandatory private pension scheme that I've always dumped into, and my family's always worked well into their 70s (my grandfather until his death this spring at 96) so I always kind of planned on keeping myself working and active, partially to supplement any retirement money and partially for the fun of it.

I spent all my savings on business school last year, but together with my girlfriend of r13 years, I've always expended quite a bit of cash on travel and restaurants, which I enjoy enormously. Right now I'm just getting out of school debt (took me about a year in a recession, not too bad) and am starting to build up some savings again.

I recommend initially saving $3,000 to open up a Roth IRA with Vanguard and put that into the 500 Index Fund. This basically automatically invests you into the top 500 companies in the United States. So if the U.S does well, your investments do well.

I'd recommend re-investing at least $100 a month into that account.

It's pointless to invest in stocks without at least $10,000 at hand. Why? Simply the return is almost worthless.

If I invest $1,000 into Microsoft and it goes up 4% then I make $40 which is probably more like $30 depending on the branch you're with because of commission.

This is entirely a game of percents and money is only worthwhile in the trading sector (Not Index Fund Sector) when you have enough money to make those percentile returns worth it.

You don't typically don't want to sell a stock unless you see at least of a 6% increase in value from your initial investment.

If you invested in Apple at 120 and it shot up to 130 that's almost a 8% gain and you just increased your net-worth by $800.

How often can you do this? Quite often if you do your research and invest into companies you really trust and think are worthwhile.

How do you do research?

Look up the different methods of valuating stocks. There's technical analysis for one which I almost swear by but there's other small factors you have to take into as well. How much does the company earn a year? How much of that money goes into expenses? How much does that company give back to its shareholders?

Trading and investing is an amazing thing to do at a young age. I'm very glad that I started early and I feel I will be in a very stable position by the age of 25.

Also, sure your investments may go down, you're also at the age where you can take risks and not be fucked in any way what so ever. If I lost all my $30,000 - fuck it? So what? So far I'm doing great and I hope to see more returns that outweigh the negative. So far? So good.

Btw, around now is almost an impeccable time to get started. You would've been golden two months ago but whatever, better now than never!

One thing you have to learn also is never be emotional. That will cause you to lose a lot of money fast. Always think logically before you do something with money. You'll seriously regret not following this rule.

One other thing I can tell you is that the market has its ups and downs. Don't freak out if your investments are worth less than you initially invested.

I invested $20k by the time the market took a hit. My net worth in investments was tackled down to $12k - I almost lost 50% of my investment!

What is it today after the market semi-recovered? I'm up quite a bit but that's because I've been selling on the way up and buying back when it's down. Once you understand volatility to an extent in the market then you can really take advantage of it.

p.s never stop investing in your index fund account. Look up something called "compounding growth" or "compounding interest" that's what your index fund is. An investment of $10,000 can be worth $100,000 essentially (given enough time). You want that fund to work for you.

Well, if you're going to invest while young you'll need guidance all along the way. Or you'll have to be an avid reader of the financial press. They used to talk about widows and orphans stocks. Securities that did well in all sorts of economic weather. They don't exist anymore. Huge money has been lost in the last ten years alone in stocks that were once thought to be indestructible. Even mighty GM is barely holding a dollar today. Bottom line? You need guidance in your financial decisions on an ongoing basis.

I am 30 and I started spending time in investing in last two-three months only. Opened an account in Sogotrade. When I started, the market was really down, so I did get some advantage in a way that I was able to buy more shares for less. I started with less than $2000.

Anyway, I bought a few ETFs that cover broad markets. Do research them. I am not going to sell those ETFs for next 10 years and add some ETFs to them slowly.

I also bought and sold few shares (BAC, C, AIG, F, GGG, RS, ATSG, TMR, PFE, INTC etc.). First 100 trades were free, so I could buy and sell even for a profit of a dollar. The broker fees is only $3 after the first month and its cheapest. It gave me a good experience (learn about market, limit, and stop limit orders for sure) and I made a little bit of money.

Besides that I am investing a bit in 401(k). Need to open an ESA pretty soon. I maintain my checking and savings account in HSBdirect so that I keep earning some interest there as well. Hope my experience helps.

Something to bear in mind. You are generally told to invest in the stock market for the long term, and that it will rise to make you rich in your old age.

That did used to happen; but over the recent decades its broken down as western companies have gone to the wall and performance has been essentially flat (taking into account inflation).

In addition the baby boomer retirements which start now and continue for a decade will withdraw money from the market to fund their retirements. That's in addition to the taxes likely having to rise to fund their healthcare.

In short, the markets are not the one way long term bet that people are told - and those geriatric pensioneers of the demographic timebomb are likely to kill the retirement industry, your savings, and your earnings stone dead.

And that's without all the jobs going to the cheaper far east.

Put your money into something that will appreciate in the long term, has real value (eg not property) and is safe from the stock market failing/collapsing.

I'm 58 and have been saving and investing since I was about 28. I've done very well, even with the most recent downturn. Rules of the road: 1. Invest every year, in every market. You can never tell when you are at a peak or a valley except in retrospect. 2. Diversify. Buy funds, by different type of funds, buy funds with minimal fees. That means buying at places like Vanguard, Fidelity, others. Put about half (more if you are young) of your money into stock funds, the rest into bonds. 3. Don't react to the market, don't try to time the market. Just keep buying. Unless you somehow get next year's Wall Street Journal to read now, you don't have a clue what next year's market will be like. But over time, stock markets do better than anything else, take less of your time, and are safe over the long haul if you divirsify. 4. Money that you'll need within 5 yrs: put that in money markets or CD's, not the stock market (see number 3 above). 5. Don't sell, until you need the money (i.e., retirement). Again, you can't time the market, don't try.

I started early and it didn't go to well becasue I became a daytrader and had some tremendous leverage. So, first of all, avoid stock options and avoid margin.

Do not base a purchase on the recent stock price history. Most people lose becasue they do this. They buy and buy and buy as everything goes up and they sell and sell and sell as it goes down.

Buy companies you understand and have a good feel for. Annual reports are bullshit, analyst are liers, there is a lot of disinformation out there.

Once you make a significant investment in one cmopany, I would recommend looking for a different company. Again, buy shit you understand and you think will do well long term. Don't worry about daily, monthly or yearly fluctuations.